The never-ending need for more capacity brought steady strides in switching technology as well. A simple architecture had been developed early on. Some switching stations handled local circuits, others connected clusters of these local centers, and still others dealt with long-distance traffic. Whenever congestion occurred, the routing was changed according to strict rules. By the 1970s Bell engineers had devised electromechanical switches that could serve more than 30,000 circuits at a time, but an emerging breed of computer-like electronic switches promised speed and flexibility that no electromechanical device could match.

The move to electronic switching began in the 1960s and led to all-digital systems a decade later. Such systems work by converting voice signals into on-off binary pulses and assigning each call to a time slot in a data stream; switching is achieved by simply changing time slot assignments. This so-called time division approach also boosts capacity by packing many signals into the same flow, an efficient vehicle for transmission to and from communications satellites. Today's big digital switches can handle 100,000 or more circuits at a time, maintaining a remarkably clear signal. And like any computer, the digital circuits are versatile. In addition to making connections and generating billing information, their software enables them to provide customers with a whole menu of special services—automatically forwarding calls, identifying a caller before the phone is answered, interrupting one call with an alert of another, providing voice mail, and more.

In recent decades, long-distance transmission has undergone a revolution, with such calls migrating from microwave and coaxial cable to threadlike optical fibers that channel laser light. Because light waves have extremely high frequencies, they can be encoded with huge amounts of digital information, a job done by tiny semiconductor lasers that are able to turn on and off billions of times a second. The first fiber-optic telephone links were created in the late 1970s. The latest versions, transmitting several independently encoded streams of light on separate frequencies, are theoretically capable of carrying millions of calls at a time or vast volumes of Internet or video traffic. Today, the world is wrapped in these amazing light pipes, and worries about long-distance capacity are a thing of the past (see Lasers and Fiber Optics).